According to Statistics Canada, Canada's merchandise trade deficit with the world narrowed from $2.7 billion in May to $626 million in June, the smallest deficit since January 2017. Total exports increased 4.1 percent, mainly on higher exports of energy products and aircraft. Total imports edged down 0.2 percent.
Exports rose 4.1 percent to $50.7 billion in June, the first time they have surpassed the $50 billion mark. Widespread increases throughout the product sections were led by energy products, and aircraft and other transportation equipment and parts. Excluding energy products, exports were up 3.4 percent. Year over year, total exports rose 9.2 percent.
Significant export increases were also observed in other sections in June, including in the metal ores and non-metallic minerals (+22.9 percent), motor vehicles and parts (+3.7 percent) and industrial machinery, equipment and parts (+6.1 percent) sections.
Imports edged down 0.2 percent to $51.3 billion in June, despite increases in 7 of 11 product sections. Large decreases in imports of energy products and in aircraft and other transportation equipment and parts were largely offset by widespread increases. Year over year, total imports were up 4.2 percent.
Imports of energy products decreased 15.1 percent to $2.9 billion in June. Following four consecutive monthly increases, imports of refined petroleum energy products (-27.4 percent) drove the decline in June, mainly on lower volumes.
These declines were largely offset by increases in several other product sections, including metal ores and non-metallic minerals (+16.2 percent), consumer goods (+1.2 percent) and basic and industrial chemical, plastic and rubber products (+2.7 percent).
Exports to countries other than the United States increased 8.7 percent in June to a record $13.6 billion. Higher exports destined for Germany (aircraft), India (metal ores, potash), Belgium (nickel) and Mexico (aircraft) contributed the most to the increase. Lower exports to Hong Kong (unwrought gold) partially offset the overall gain.
Imports from countries other than the United States fell 1.2 percent to $18.4 billion. Lower shipments from China (cellphones, aircraft) and the United Kingdom (motor gasoline) led the decrease.
Consequently, Canada's trade deficit with countries other than the United States narrowed from $6.1 billion in May to $4.7 billion in June, the smallest deficit since March 2017.
Exports to the United States increased 2.5 percent to a record $37.1 billion, mainly on higher exports of passenger cars and light trucks. Imports from the United States edged up 0.3 percent in June to $32.9 billion. As a result, Canada's trade surplus with the United States widened from $3.3 billion in May to $4.1 billion.
June was the first month in which Canadian exports of steel and aluminum products to the United States were subject to tariffs. On a customs basis and unadjusted for seasonality, exports of steel products to the United States that were subject to a 25 percent tariff fell 36.8 percent. This decrease followed a 40.0 percent gain from February to May. The average growth for these products from February to May in the previous three years was 8.7 percent, while the average June decline was 0.2 percent. Compared with June 2017, exports of steel were down 14.3 percent.